State Council, Several Opinions on Further Promoting the Healthy Development of Capital Markets

(3) Improving the mechanisms for the cross listing of bond products on different markets and the transfer of custody at one's discretion (Article 11).

(4) No administrative examination and approval being required for private offerings, and various types of issuing entities being permitted, on the basis of lawfulness and compliance, to offer shares, bonds, funds and other such products to a number of investors not to exceed in the aggregate the specific number specified in law (Article 13).

(5) Continuing to launch various bulk resource product futures, and developing commodity options, commodity indexes, carbon emission rights and other such trading instruments (Article 15).

(6) Progressively increasing the variety of index-linked futures, index-linked options and stock options, and gradually develop treasury bond futures (Article 16).

(7) Studying the cross holding of licences by securities companies, fund management companies, futures companies, securities investment consulting companies, etc., and supporting the application by other qualified financial institutions for securities and futures business licenses on the basis of risk isolation. Supporting the exploration of comprehensive operation by securities and futures firms and other financial institutions by way of mutual control or cross shareholdings, provided that risks are controllable (Article 17).

(8) Supporting the progressive expansion of the scope and size of investment in the capital markets of the funds of institutional investors such as social insurance funds, corporate annuities, occupational annuities, commercial insurance capital, foreign long-term funds, etc. Promoting the establishment of fund management companies by commercial banks, insurance companies, etc. and vigorously developing securities investment funds (Article 19).

(9) Expanding the scope of qualified foreign institutional investors and qualified domestic institutional investors, and increasing investment limits and ceilings. Steadily relaxing direct investment in domestic capital markets by individuals located abroad, and promoting in an orderly fashion direct investment in foreign capital markets by individuals in China. Establishing and improving a system for the protection of the rights and interests of individuals in cross-border investment and financing. Subject to compliance with foreign investment industrial policies, gradually relaxing restrictions on the holding of shares in listed companies by foreign investors, and improving the national security review and anti-monopoly review systems for mergers and acquisitions (Article 21).

(10) Progressively increasing the level of openness of the securities and futures industry to foreign investment. At the appropriate time, the scope of business of domestic securities and futures firms in which foreign investors have an equity stake or a controlling interest will be expanded. Domestic securities and futures firms are encouraged to implement a “go global” strategy and enhance their international competitiveness. The linkage of domestic and foreign exchange markets will be promoted, and mutual recognition of domestic and foreign funds and mutual recognition of stock market products will be studied and promoted. Reform of the B share market will be steadily explored (Article 22).

(11) Intensifying regulatory cooperation with the Hong Kong and Macao Special Administrative Regions and Taiwan. Strengthening cooperation with international securities and futures regulatory organisations and actively participating in the formulation of international securities and futures regulatory rules (Article 23).

Issued: May 8 2014

Main contents: The Opinions set forth the following guidelines on the development of capital markets:

(1) Relying on market rules, market pricing and market competition to maximise benefits and achieve the greatest efficiency so as to give markets a determining function in the allocation of resources (Article 2).

(2) Active and steady promotion of reform of the share offer registration system (Article 4).

(3) Improving the mechanisms for the cross listing of bond products on different markets and the transfer of custody at one's discretion (Article 11).

(4) No administrative examination and approval being required for private offerings, and various types of issuing entities being permitted, on the basis of lawfulness and compliance, to offer shares, bonds, funds and other such products to a number of investors not to exceed in the aggregate the specific number specified in law (Article 13).

(5) Continuing to launch various bulk resource product futures, and developing commodity options, commodity indexes, carbon emission rights and other such trading instruments (Article 15).

(6) Progressively increasing the variety of index-linked futures, index-linked options and stock options, and gradually develop treasury bond futures (Article 16).

(7) Studying the cross holding of licences by securities companies, fund management companies, futures companies, securities investment consulting companies, etc., and supporting the application by other qualified financial institutions for securities and futures business licenses on the basis of risk isolation. Supporting the exploration of comprehensive operation by securities and futures firms and other financial institutions by way of mutual control or cross shareholdings, provided that risks are controllable (Article 17).

(8) Supporting the progressive expansion of the scope and size of investment in the capital markets of the funds of institutional investors such as social insurance funds, corporate annuities, occupational annuities, commercial insurance capital, foreign long-term funds, etc. Promoting the establishment of fund management companies by commercial banks, insurance companies, etc. and vigorously developing securities investment funds (Article 19).

(9) Expanding the scope of qualified foreign institutional investors and qualified domestic institutional investors, and increasing investment limits and ceilings. Steadily relaxing direct investment in domestic capital markets by individuals located abroad, and promoting in an orderly fashion direct investment in foreign capital markets by individuals in China. Establishing and improving a system for the protection of the rights and interests of individuals in cross-border investment and financing. Subject to compliance with foreign investment industrial policies, gradually relaxing restrictions on the holding of shares in listed companies by foreign investors, and improving the national security review and anti-monopoly review systems for mergers and acquisitions (Article 21).

(10) Progressively increasing the level of openness of the securities and futures industry to foreign investment. At the appropriate time, the scope of business of domestic securities and futures firms in which foreign investors have an equity stake or a controlling interest will be expanded. Domestic securities and futures firms are encouraged to implement a “go global” strategy and enhance their international competitiveness. The linkage of domestic and foreign exchange markets will be promoted, and mutual recognition of domestic and foreign funds and mutual recognition of stock market products will be studied and promoted. Reform of the B share market will be steadily explored (Article 22).

(11) Intensifying regulatory cooperation with the Hong Kong and Macao Special Administrative Regions and Taiwan. Strengthening cooperation with international securities and futures regulatory organisations and actively participating in the formulation of international securities and futures regulatory rules (Article 23).